Agtech startup raising $12M to commercialize biopesticide

KALAMAZOO — The $12 million in new capital Vestaron Corp. seeks to raise would enable the company to complete a journey to bring to market a new environmentally friendly pesticide.

Vestaron closed in late June on the first round of the capital raise, netting more than $4.2 million from five existing investors. The capital will go toward producing product at scale for the first time, setting up distribution channels and hiring key senior managers, said CEO Anna Rath.

A Kalamazoo-based firm that developed a biopesticide based on spider venom, Vestaron should bring its first product, named Spear, to market “very soon” for greenhouse vegetables and ornamentals, Rath said.

A second product for Vestaron’s first generation “family of products” could follow in 2019 for high-value field crops, she said.

“What we’re doing right now is transitioning the company from the R&D phase of its life to the operational and commercial phase of its life,” Rath said.

An Italian contract manufacturer produces Spear as Vestaron works to establish a U.S. production base.

Rath joined Vestaron as CEO in April and splits her time between Kalamazoo and her home in Phoenix, Ariz. She has more than a decade of experience working with agtech companies backed by venture capital.

Formed 13 years ago and supported through millions of dollars in venture capital raised for research and development, Vestaron will remain based in Kalamazoo “for the foreseeable future,” Rath said. The company is presently housed in the Western Michigan University Innovation Center.

“Vestaron’s got a really solid R&D team established in Kalamazoo. That team works well together and has accomplished some pretty amazing things. The last thing I would want to do is interrupt the functioning of that team,” Rath said.

The potential to go well beyond Vestaron’s first generation of products with its agricultural technology lured Rath to the company, she said.

There’s a “whole pipeline of additional products” ahead using peptides made from spider venom, and the production platform for the first family of products also can produce a “wide variety” of products in other industries such as animal health and pharmaceuticals, Rath said.

In hiring Rath, Vestaron has a CEO “with the vision to realize the expansive potential of its technology,” said Chairman Keith Gillard, general partner at Chicago-based venture capital firm Pangaea Ventures, a Vestaron investor.

“Anna recognizes the broad applicability of a production platform that so effectively expresses these very powerful peptides, sees how it can drive the next paradigm in crop protection, and has the demonstrated ability to make it a reality,” Gillard said.

The compound used in Spear also has shown “really strong synergy” with Bt, or Bacillus thuringiensis, a biologic insecticide used on crops that’s a multi-billion-dollar franchise for agricultural companies. Vestaron’s products can help to maintain the efficacy of Bt where pests have developed a resistance, essentially “rescuing these valuable franchises,” Rath said.

“There’s a much bigger vision and potential for what Vestaron can become,” she said. “Where today Vestaron is known as the spider venom company, in my view tomorrow it can be known as the peptide company in the space of crop protection and, potentially, more broadly through its production platform.”